The UK Supreme Court has today issued its decision in the case of Uber BV and others -v- Aslam and others.
The issues which the court had to determine was whether or not private hire vehicle drivers who provided their services through the Uber App were workers for the purposes of employment law.
The legal and financial implications of this mattered to both Uber and the drivers.
If the drivers were held to be workers then Uber would be legally require to pay the drivers national minimum wage and the drivers would be entitled to receive paid annual leave.
Uber London Limited had a UK subsidiary licence from the Uber BV Dutch company to operate private hire vehicles in London. Mr Aslam and Mr Farrar were licensed to drive private hire vehicles in London and did they used the Uber App to do that.
Aslam and Farrar claimed that they were workers. Uber said they were not.
In terms of Section 230(3) of the Employment Rights Act 1996 a “worker” is defined as an individual who works under a contract,
“whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of that contract, that of a client or customer of any profession or business undertaking carried on by the individual”.
Uber’s Position Before the Supreme Court
Uber’s position was the drivers were not workers.
To support that it was argued that:-
- when an individual ordered a taxi through the Uber App, a contract was made directly between the driver and the passenger and that meant that the driver was agreeing to provide transportation services to the passenger.
- the drivers were free to work when they wanted and they could work as little or as much as they wanted.
- the drivers received a service charge for the use of Uber’s technology.
The Supreme Court’s View
The Supreme Court disagreed with Uber that the drivers were NOT workers.
As there was no written contract between the drivers and Uber London, the Court saud that the nature of the relationship had to be inferred from the parties’ conduct.
It then said that the correct position to be drawn from the facts was that Uber London contracted with passengers and engaged drivers to carry out the bookings. Effectively the contract was between Uber London and the passengers, not the driver and the passengers, as Uber were trying to claim. There was no direct contract between the passengers and the drivers.
The Supreme Court ultimately concluded that the “transportation service performed by the drivers and offered to passengers through the Uber App is very tightly defined and controlled by Uber.”
It also said that the drivers were in “a position of subordination and dependency in relation to Uber such that they have little or no ability to improve their economic position through professional or entrepreneurial skill”.
In reaching that conclusion, the Supreme Court relied on five factors:-
- When a fare is booked through the Uber App, it is Uber that sets the fare, not the driver. The drivers are not permitted to charge any more than the fare calculated by the App.
Therefore, Uber dictates drivers are paid for the work that they do.
- The contract terms stipulating the basis upon which the drivers perform their services are imposed by Uber and the drivers have no say on those.
In addition, the drivers have limited choice on whether or not to accept fares as Uber has constraints in place which mean that the drivers have to accept fares. This includes Uber including monitoring the driver’s rate of acceptance and cancellation of trip requests and if too many trips are declined or cancelled, then the drivers are penalised as they are then automatically logged off the Uber App for 10 minutes. This ultimately stops the driver from working until they are allowed back on.
It was also held that the time when a driver was logged onto the Uber App, that that counted as working time.
- Passengers were asked by Uber to rate their drivers on a scale of 1 to 5 and if any driver fails to maintain an average standard then they receive a series of warnings and if their average rating did not improve then their relationship with Uber would terminate.
The Court said that this showed that Uber exercise significant control over the way in which the drivers deliver their service.
- Drivers were not able to get details from a passenger directly and could not establish an ongoing relationship for future services with the driver as opposed to just one single trip.
What businesses will this decision affect?
Businesses which engaged self-employed contractors. As the decision highlights, the fact that a business believes that it is employment a contractor is not enough to show that the contractor is not a worker. The Uber decision emphasises that a court will look at the reality on the ground and how that contractor carries out their role.
This matters because in light of this decision your business could face claims that your contractors are in fact workers.
Remember that a worker is entitled to :-
- Written terms outlining their job rights and responsibilities;
- National minimum wage;
- Paid holidays;
- Pay slips;
- Protection against unlawful discrimination;
- Protection for whistleblowing complaints;
- Not being treated unfairly if you work part-time.
The GMB Union in the Uber case has indicated that tens of thousands of drivers could be entitled to an average of £12,000 each in compensation.
That must set alarm bells ringing for business.
In the current climate, would your business be financially able to meet such a liability?
If any of the factors in the Uber decision caused concern or raise any doubts about the contract which you have with those carrying out services for you then please contact me to discuss this further.